This is oursecond installment of Pharmboy’s Phavorites.
Our original post ran on August 8th, when we went long in a series of very timely calls on GSK, with a $33.93/34.37 buy/write (GSK up 3% so far); AZN was our bear cover with a .45 diagonal that is now .40 (up 11%); MRK2011 $25s are up 20% and the buy/write option is still on target as long as it can be rolled even to Oct $32.50s (but too soon for that). So astounding performance from our Big Pharma picks – note how you can use a targeted diagonal to cover longs and winrather than an index put that is sure to lose money when your upside plays do well.
On the riskier Biotech side, ARIA is well on track to cover our .60/$1.05 buy/write, which can pay up to 316% in February at $2.50; ONTY wasa more bearish buy/write and it’s a good thing as they dipped .12 since our entry. We’re looking good with a $2.74/3.87 hedged entry and anyone who followed my patiententry advice (“expect them to fill that gap to $4.50“) would have had a fantastic opportunity this week. OGXI was one I did not trust but it’s right on track with my cautious play as the Jan $17.50s are up 5% and the written Sept $30 puts and calls are still $7 and right on target.
SPPI was bashed by Cramer’s crew, also giving us a great entry and we hit goal on selling the naked Jan $5s for $1.10 (now $1.05), which is a huge win (44% on $2.50 in margin) if they can just hold $5 through January. The play of the $4.35/5.92 Sept buy/write is well on track with the stock at $6.49 as well but our vertical spread took a .10 hit so far, which isn’t too bad though as it’s gone against us so far.
All in all, a very successful first round and now Pharm is back and this time he is making his own option picks to go with the trades. I’m a little more cautious here than I was on the 8th -until we see what levels the market holds next week but they are all well worth our attention in the week ahead:
Hello all!Another installment of Pharms Phavorites.One thing that bothers me is knocking pharma for its profits and the overall benefits to The People.Crap that…
